Dalata Agrees €65m Clayton Charlemont Hotel Deal With Deka

Main Photo: The Clayton Charlemont Hotel

Date: April 2020

Location: Grand Canal, Dublin, Ireland

Name: The Clayton Charlemont Hotel

No. of Keys: 187

Seller: Dalata Hotel Group has agreed to sell and leaseback its Clayton Hotel in Charlemont in Dublin city centre. Dalata will pay just over €3m a year in rent on a 35 year lease.

Buyer: Real estate investment group Deka Immobilien. The hotel currently contains 187 bedrooms, a bar and restaurant, a fitness suite and meeting room facilities.

Dalata purchased the site in February 2016 and started construction in late 2016. The hotel opened for business in November 2018 and the company has invested €41.6m into the purchase of the site and construction of the hotel.

As part of the agreement, Dalata will complete at its cost, the final part of the hotel development, which will see the conversion of 38 Charlemont Street into three additional Clayton bedrooms and a café.

These works are expected to be completed in 2020 and will result in no change to the property rent.

The company also has a similar deal with Deka for its Clayton Hotel Burlington Road property.

Dermot Crowley, Dalata’s deputy chief executive Business Development & Finance, said the company started work on this deal in advance of the Covid-19 crisis.

“Completing a transaction such as this despite the onset of the crisis demonstrates the commitment of both Deka and Dalata to this partnership and their long-term commitments. The agreed terms for this transaction reflect both the quality of the asset and the strength of Dalata’s balance sheet,” he said.

He said the funds generated from the deal “will further fortify the company’s considerable cash resources during the current Covid-19 crisis”.

In a note, Davy stockbrokers said today’s deal was a major vote of confidence in the business. “It transforms the company’s liquidity position and highlights its extreme undervaluation,” the stockbrokers added.

Price: €65m

Price per Key: €347,594

THPT Comment: Sound deal all round, and as Davy stockbrokers say, strong confidence in Dalata’s management team.

First Seen: RTE Ireland

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